Event

On May 10, Algerians voted a new parliament in the first election since the outbreak of the revolutions in the region in early 2011. With 44 participating parties contesting 462 seats, the ruling Front de Libération National (FNL) and its government partner, the Rassemblement National Démocratique (RND) reinforced their influence in the assembly, having won 220 and 68 seats respectively. Unlike the strong performance of Islamist parties in elections in other countries in the region, Islamist parties landed only 58 seats altogether. Despite reports of voter apathy, turnout stood at 42.9%, compared to 35.6% during the previous election. Opposition groups have stated that this figure and the election results were manipulated, which led to a parliamentary boycott by some opposition parties and a walkout during the parliament’s inaugural session by Islamist MPs. The elections were attended by international election observers, including an Election Observation Mission of the EU, which still has to publish its final report.

Impact on country risk

Despite discussions about voter turnout and results, the elections seem to have strengthened the position of the ruling government. However, a reconcilement between the FNL and the RND on the one hand and the Islamist Mouvement de la Société pour la Paix (MSP) – who only quit the previous government four months before the elections – may be required in order to proceed with the planned constitutional  reforms promised by President Bouteflika. The modest performance of Islamist parties and the absence of serious violence during the past year and a half, compared to neighbouring countries, suggest that the Arab spring is being digested differently in Algeria, as particular historical and socio-political factors are at play and the country has vast energy resources. However, tackling high (youth) unemployment, implementing political reforms, diversifying the economy, as well as a widening budgetary deficit, a breakeven oil price (expected to pass USD 120 this year) and the succession of President Bouteflika remain major hurdles for the country.

Analyst: The Risk Management Team, r.cecchi@credendogroup.com